Jan 7th 2009: The day of confession ................................................. 3 The history of Indian IT Industry ...................................................... 4 History of Satyam............................................................................. 5 Indian companies confirm bids for Satyam...................................... 6 Acquisition by Tech Mahindra ......................................................... 7 A friendly merger: Mahindra Satyam & Tech Mahindra .................. 8 Reference....................................................................................... 10

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Jan 7th 2009: The day of confessionIn any software project, according to an industry adage, programmers think they are 90% done for about 50% of the time. That paradox will be familiar to the owners of Satyam Computer Services, which was once India’s fourth-biggest software and services firm. The scam perpetrated by its founder, B. Ramalinga Raju, and his brother is equally hard to fathom. On January 7th Mr Raju confessed to cooking Satyam’s books for years, and admitted that a $1 billion cash pile did not in fact exist. But were there hands in the till? But when a liar confesses, can you believe him? Many suspect that even now only 50% of the truth is out. Cash, after all, is hard to fake. Satyam’s books were audited by PricewaterhouseCoopers. According to the Economic Times, an Indian newspaper, the auditor says it verified Satyam’s fixed deposits with the banks that held them. So perhaps the money did exist, but has since been spirited out of the company. Such tricks are not unusual in India, even if the scale of the Satyam fraud is extraordinary. Indian “promoters” (who include business families and other corporate insiders) still hold almost half of the shares on the National Stock Exchange (NSE). But...